Best Asset Protection Strategies For Business Owners
There is a huge need for you to think about your personal affairs especially now that there are more and more people starting up as entrepreneurs.
When you first startup, you tend to think about securing and achieving business growth. That’s brilliant, however, this can lead you to forget about protecting your assets and family.
So, if you’re starting to succeed as an entrepreneur, but haven’t sorted your assets, have a look at these top asset protection tips:
1. Protect Your Assets Through Documentation
Nobody wants to think about a partnership failure or death, especially when you are first starting a business. However, it’s essential for you to get this sorted earlier rather than later.
This conversation is best to have when you are first starting up, so you can protect your personal position in writing. There is usually a provision for what happens with what share in different circumstances, including death.
It is very rare for things to be included about what happens after a divorce or death but it’s best to seek legal advice and agree on any terms with your spouse.
2. Safeguard Assets For Your Children
If you want to put money away for your children or buy them property, then there are steps you can take to do these and make sure they stay in the family.
Have a look at holding things in trust for your children. You could consider lifetime gifts as a way to reduce your inheritance tax liability.
If you want to protect these further, you could have a look at how do NFT’s work. If your children are entering into a marriage, you may also want to agree with them that they enter a pre-nuptial or cohabitation agreement.
Thinking about a pre-nuptial agreement? Make sure there is some time ready to fit your individual circumstances. You can’t really follow a template for these, you need it to fit your needs now and in the future.
3. Be Thorough
It’s completely normal for entrepreneurs to not always have these aspects of their lives in order, especially in the start-up stage.
Cash can be tight and spending money on things like solicitors to help protect your assets might not be on your mind.
However, you shouldn’t cut corners and leave yourself vulnerable. When it comes to legal documentation, you need to be thorough. Ensure you have it in place to protect your personal affairs.
4. Prepare your will
To begin with, a basic will, coupled with an approach in the business documents, will be sufficient. You may be tempted to think this is enough, but once you hit £500,000 or more, you will likely need something more detailed.
The best thing to do is to review your will every five to seven years. This will ensure it still meets your needs and is efficient in terms of inheritance tax. If your wealth has grown or your personal assets have changed, then an annual review may be needed.
This guide should help you to start thinking about your personal finances as an entrepreneur. Do you have anything else that could help? Please share them below.